Last year, the financial industry and associated trade groups pushed Congress to make the change, saying the placards were costly and opened them up to potential lawsuits. The Credit Union National Association said that complying with the rule would cost each financial institution up to $2,000, The Hill reports.
According to the CFPB, the average cost of using an ATM has increased to nearly $4 from $1.50 in 1999 when the law requiring the placement of the placards took effect.
In December, Congress passed an amendment to the Electronic Funds Transfer Act that requires regulators to implement the changes. Rules issued by the CFPB, however, still require all ATM operators to disclose fees and charges to the consumer before the transaction.
“The case for the bill was straightforward, streamlining a duplicate, unnecessary requirement while protecting notice and access for the consumer,” June Langston DeHart, a partner at Washington-based Manatt, Phelps & Phillips, said, according to American Banker. “It’s going to close the door on these spurious lawsuits.”
While no industry-wide data is available, Bruce Renard, the executive director of the National ATM Council, estimates that about 2,000 lawsuits were filed regarding ATM placards, and many were settled out of court for about $10,000 each.
The ATM fee-notice lawsuits were often filed by lawyers who represented individuals who would scout for missing placards and sometimes remove the placards before withdrawing cash, leading some banks to start taking photographs of their ATMs during maintenance checks to be used in legal defense, American Banker reports.